Sunday, January 16, 2000,
Chandigarh, India



‘Interest rate cut a blow to common man’
NEW DELHI, Jan 15 — Trade union organisations today described the government’s decision to reduce the interest rate on small savings schemes and public provident fund from 12 to 11 per cent as a “blow to the interests of the common man’’.

Ministers assure industrialists
HOSHIARPUR, Jan 15 — Mrs Mohinder Kaur, Minister for Health Services and Mr Tikshan Sud Minister for Excise & Taxation, Punjab, visited the industrial belt of Nasrala to meet industrialists yesterday.

Move to sell agro office opposed
JWALAMUKHI, Jan 15 — The decision of the Himachal Agro Industries Corporation to close down its Divisional Office has kicked up a row. Farmers are annoyed with the decision and the issue has taken political overtones.

Satyam Online works from 33 locations
CHANDIGARH, Jan 15 — Satyam Online, a private Indian Internet service provider launched an innovative scheme for all its subscribers. Named “Plunder down under bonanza for the triangular series featuring India, Pakistan and Australia for the Carlton & United World Series Championship.

Collect repayment of gold dues by Dec-end
CHANDIGARH, Jan 15 — The RBI has asked the holders of the National Defence Gold Bonds, 1980, to collect repayment of the gold due to them latest by December, this year.


‘Interest rate cut a blow to common man’

NEW DELHI, Jan 15 (UNI) — Trade union organisations today described the government’s decision to reduce the interest rate on small savings schemes and public provident fund from 12 to 11 per cent as a “blow to the interests of the common man’’. The Centre of Indian Trade Unions (CITU) said the decision was “dictated by big business corporates in the country’’. “The move will hit hard the small investors, particularly the senior citizens, who prefer these investments for safety of their hard-earned superannuation benefits,’’ CITU Secretary W.R. Varada Rajan said in a statement today.

The CITU said this “retrograde’’ move by the Union Government would lead to diversion of people’s savings to private debt and equity options. “Unscrupulous and speculative private finance companies will flourish as a result of the government decision,’’ it said.

The trade union body urged the Government not to accept any recommendation of the Dave Committee in so far as they relate to the provident and pension funds.

MUMBAI, (PTI): The Central Government’s decision to effect across-the-board one per cent cut in interest rates on its savings schemes has spurred a demand for lowering of lending rates by banks, while analysts said the move has shrunk individuals’ wealth creation.

Indian Merchants’ Chamber (IMC) hoped banks will lower the lending rates as well by one per cent, so that industry, trade and other productive sectors can take advantage of cheaper finance to cut cost and generate efficiencies.Top


Ministers assure industrialists
From Our Correspondent

HOSHIARPUR, Jan 15 — Mrs Mohinder Kaur, Minister for Health Services and Mr Tikshan Sud Minister for Excise & Taxation, Punjab, visited the industrial belt of Nasrala to meet industrialists yesterday.

Mr Chander Mohan Puri, President and Mr Ajit Singh Saini, General Secretary of the Factory Owners Association, Nasrala, said many incentives given by the State Government in the past had been withdrawn. The incentives were given to set up industrial units in the backward district of Hoshiarpur.

As a result no new inudstrial units had been set up in the district. They also said flood water from the adjoining Bhangi Choe also hit their units.

Mrs Mohinder Kaur assured the industrialists that their problems would soon be discussed with the State Government.Top


Move to sell agro office opposed
From Our Correspondent

JWALAMUKHI, Jan 15 — The decision of the Himachal Agro Industries Corporation to close down its Divisional Office has kicked up a row. Farmers are annoyed with the decision and the issue has taken political overtones.

Himachal Pradesh Chief Minister Prem Kumar Dhumal today held a meeting at the Divisional Office to decide its fate. The Corporation will reportedly dispose of the office to pave the way for a degree college. The farmers had appealed to the authorities that the premises should not be desposed of and the college should be shifted to suitable place elsewhere, otherwise they would launch an agitation.Top


Satyam Online works from 33 locations
Tribune News Service

CHANDIGARH, Jan 15 — Satyam Online, a private Indian Internet service provider launched an innovative scheme for all its subscribers. Named “Plunder down under bonanza for the triangular series featuring India, Pakistan and Australia for the Carlton & United World Series Championship.

Now for all registrations of Satyam Online Internet connections done upto January 17 a customer can get an additional 10 hours absolutely free.

Satyam Online Internet service comes in a convenient CD form, bundled with licensed version of value-added software worth Rs 6,500 absolutely free. The Internet connections are available in a trial pack — Discover 30, a regular use pack — Discover 90, an extra usage pack — Discover 180, a heavy usage pack — Discover 360 and a corporate pack — Discover 600. All the connections come with Flexinent feature, wherein if the customer logins between 10 p.m. to 8 a.m., they will be charged at half.

Satyam Online has been continuously expanding its operations and is present in 33 locations across the country. The company’s web site acts as a gateway to interactive information and content on the Internet.

Satyam Infoway Ltd is a subsidiary of Satyam Computer Services Limited and is the country’s largest Internet and e-commerce company. Satyam Infoway has partnered with world leaders in the industry — Sterling Commerce, USA, CompuServe and Open Market, USA to provide end-to-end electronic commerce and Internet products and services.Top


Collect repayment of gold dues by Dec-end
Tribune News Service

CHANDIGARH, Jan 15 — The RBI has asked the holders of the National Defence Gold Bonds, 1980, to collect repayment of the gold due to them latest by December, this year. Delivery orders for the gold, in exchange of the discharged bonds, can be obtained by the holders or their authorised representatives from the Public Debt offices of the RBI at Ahmedabad, Bangalore, Mumbai, Calcutta, Hyderabad, Jaipur, Kanpur, Chennai, New Delhi, Nagpur and Patna, an official communique from the RBI said.

The release said that although the Bonds matured for repayment in October, 1980, some of the holders did not lodge them for collection of the gold due to them. Since it is not possible for the bank to continue the present arrangement of repayment of gold at various offices for an indefinite period, it has been decided to fix the deadline of December 2000, the communique said. It added that gold upto the market value of Rs 20,000/- could be collected by Registered and Insured post.Top


Will FIIs play waiting game?
by Ashok Kumar

WITH the markets seemingly on a roller-coaster ride having risen by 500 odd points on the first two trading days of the new millennium and then shedding nearly half thereof within an hour of trading on the third day, it does seem more or less certain that this rally is now operator driven. Well, to put it simply, there seems to be a major warehousing exercise on with big operators picking up IT and related stocks — left, right and centre in anticipation of FIIs coming in search thereof later this month. But what happens if the FIIs find the market already overheated and choose to play the waiting game? Well, your guess is as good as mine. In this context, it is worthwhile mentioning that unlike you and me, FIIs have other markets to choose from too, and that some of the other Asian markets are showing fair signs of revival.

There are a lot of theories floating around and one of the more interesting ones revolves around the declining price of Hindustan Lever which seems to have lost its position of pre-eminence at the Indian bourses to the seemingly omnipotent IT and media stocks like Infosys Technologies and Zee Telefilms. As the theory goes, it is opined that with the advent of e-commerce, the big advantage that Hindustan Lever enjoyed over its competitors thus far on account of its superior marketing muscle and widespread network stands minimised, and that is why this stock is being revalued.

Now, if the market grapevine is to be believed, there is a Rs 500 downside to this scrip, still waiting to happen. Well, the theory is interesting. No doubt, but ignoring the pedigree of a time-tested blue-chip company which is part of the Unilever group. In fact, if the Rs 500 drop does materialise for some reason, it should then provide an excellent defensive investment opportunity for a medium to long-tern investor.

Another quality stock, which seems to have fallen out of favour at the bourses these days is Castrol. Of course, it must be remembered that this company declared a liberal bonus issue last year and the process of recouping is on. With the lubes segment getting more intensely competitive, it is a volumes game there and it here that Castrol is finding the transition process a trifle painful. However, here too, the pedigree of the company and its time-tested track record suggests that once the transition is completed, this company too will be restored to its past glory. A heartening part of the story here is that the downside from the current price level is minimal.

Odd though it may sound, what we do these days is convince our clients who wish to remain invested in the market come what may, to pick up these two stocks in minimal quantities out of profits they generate in the booming infotech sector. Perhaps, sooner rather than later, the wisdom of such a move might dawn on them.

Penny stocks sometimes yield big returns but identifying such stocks which despite being down and out for the count still have some life left in them is tricky, to say the least. In this context, Bharat Immunological, a formulation company engaged in the Indian pharma segment merits attention. Its share price has begun moving again after stagnation at around Rs 7 for a while, and even touched Rs 14 in the interim before dipping back below Rs 10. What’s cooking here? Logically, it should either be a turnaround, or even a possible takeover. Either way, it should translate into a better share valuation. But then, remember, this is a shot in the dark. But then, as Ukridge, a delectable PG Wodehouse character says ‘To accumulate, you need to speculate’. Amen!Top


Dismissal on inference
by Praful R. Desai

Q: Whether inference of theft can be made only on the arrest and FIR registered against workman?

Ans: Madras HC was dealing with this question in Chief Engineer, T.N. Electricity Board v Govindraj M. (1999-11-LLJ-1435) held the view thus:

There is no specific finding by the Inquiry Officer with respect to the charge of theft against one respondent-workman on the basis of any evidence on record. He was acquitted by the Criminal Court from the charge of theft. The only finding returned by the Inquiry Officer with respect to the charge of theft was an inference drawn by him from the fact that the workman was arrested and an FIR was registered against him.

It cannot be disputed, observed the H.C., that (mere) arrest or launching of an FIR by itself cannot either constitute an evidence of proof or a circumstance, based on which a person can be found to be guilty of the charge.

It was accepted at the Bar that the finding returned by the Inquiry Officer on the charge of theft attributed to the delinquent workman cannot be sustained in any circumstance or on facts on record, much less by a quasi-judicial authority even administratively.

The other charge against the workman was that he was absent from duty unauthorisedly for about 10 days. It was again admitted at the Bar that the workman did apply for leave on the next day. The workman has served the board without any blemish for 19 years.

There is no gainsaying that the punishment of dismissal from service awarded is not only disproportionate to the charge attributed or proved on the basis of the Inquiry report, but is unconsciable. In the meantime, workman has superannuated. Workman has fairly accepted 75 per cent of the back wages with an order of reinstatement and all other retirement benefits.

Consequently the HC held that the order of dismissal is bad in law, and that the workman was reinstated with 75 per cent of the back wages and with all other retirement benefits. The amount was directed to be paid to the workman within eight weeks from the day of this order. If not, the Board thereafter shall pay 12 per cent interest on the amount so due to be paid to him.

In that way, the HC disposed of the petition.Top


by R.N. Lakhotia

Q: I retired as a lecturer from a private college in Punjab recently and I hope to get 2.5 lakh as provident fund. I am not getting any pension for the time being. Please advise.

(i) Is the amount of P.F. taxable?

(ii) How the amount be invested to get regular income? In case it is invested in Bank/P.O. will there be tax deduction at source if income is more than 10,000. How to get exemption from T.D.S. if this is the only source of income.

— Gopal Krishan, Jalandhar.

Ans: No income-tax is payable on receiving the money from the Provident Fund. The entire amount is tax exempted. To enable you to get the regular tax free income on this amount the best investment suggested to you is to invest in monthly income plan of Mutual Fund so that the entire income becomes tax free. In case you are proposing to make the investment in Post Office or Bank fixed deposit and the concerned authorities insist for tax deduction at source but as per your own calculation your total income during the Financial Year is likely to be less than the exempted amount of income, then you can simply submit Form No. 15H to the concerned bank/Post Office so that no tax is deducted by them on your interest payment.

Q: Kindly give complete information regarding rebate and tax on the following points:

(i) Standard deduction U/s 16 (1)

(ii) U/s 80L

(a) Interest on encashed NSC’s

(b) Withdrawals from NSS

(c) Payment of interest on loan from banks

(iii) U/s 88 and 88B

(a) Investment in UTI

(b) Repayment of loans taken from bank

(iv) U/s 234 A,B,C

(v) Capital Gains

(a) Sec 54EA and 54EB

(vi) Donations.

— J.D.’ Crus, Mandi Dabwali.

Ans: The Standard Deduction permissible in the Income Tax Law to the salaried employee is @ 33.3 per cent of the salary subject to a maximum of Rs 25,000 in case the salary does not exceed Rs 1 lakh. If however, salary exceeds Rs 1 lakh, the standard deduction gets reduced to Rs 20,000. There is no standard deduction in case the salary income exceeds Rs 5 lakh. As per S. 80L maximum exemption is Rs 15,000. The interest on encashed NSCs is eligible for tax deduction U/s 80L. Withdrawls from NSS Old A/c is taxable in Income Tax. However, the withdrawals from NSS new A/c are not taxable. Payment of interest on bank loan is eligible only against the income accruing out of the loan taken from the bank. If interest payment is for personal use, then no tax benefit available in respect of interest. U/s 88 tax rebate @ 20 per cent is permissible on maximum Rs 70,000 in a year. For a senior citizen, tax rebate U/s 88B is upto Rs 10,000. Income from investment in UTI is fully tax exempted. Penal interest for default etc. and deferment of advance tax is chargeable U/s 234C. Capital gains is on selling your capital assets. Section 54EA and 54EB contain provisions to save tax on long-term capital gains. Deduction U/s 80G is permissible on donation only to recognised institution @ 50 per cent. Some specific donations are also eligible for 100 per cent tax deduction.

Q: I am a Central Government employee. My income from salary for the year 1999-2000 will be Rs 1,18,000 (approx) including HRA and transport allowance. After the implementation of the 5 Central Pay Commission I have received Rs 59,000 in June, 99, including HRA as salary arrears from January 1996 to May 1999. My total income receivable will be Rs 1,77,000 (approx) for the year 1999-2000.

Now my queries are—

1) How can minimise the income tax by better planning for an income of Rs 1,77,000?

2) Can I admissible for any type of tax rebate for the salary received in arrears Rs 59,000 from 1996 January to May 1999. If so, how?

— T.K. Mathew, Chandigarh.

Ans: On the facts stated by you, you should make investment u/s 88 to the tune of Rs 70,000 to enable you to achieve tax rebate of Rs 14,000. In respect of arrear of salary, you can tax relief u/s 89 (1) by requesting your employer to tax the salary received in arrears in different years. By making investment upto Rs 10,000 under LIC Pension Plan, you can save Income Tax on Rs 10,000 investment.

Q: Sale of the Assessee engaged in retail trade is Rs 30,00,000. Under Section 44AF, a sum equal to 5 per cent of the total turnover (30,00,000) shall be deemed to be profit and gain of such business which come to Rs 1,50,000 but in this case his stock caught fire and goods worth Rs 2,00,000 were burnt & thus he suffered loss of Rs 2,00,000. Please clarify if:-

(1) Whether after adjusting loss of 2,00,000-50,000 can be carried forward as I am declaring Profit of Rs 1,50,000 under Section 44AF.

— Manmohan Sahdev & Suresh Goyal, Ludhiana.

Ans: On the facts stated by you the benefit of loss of stock due to fire is not permissible within the framework of section 44AF of the Income Tax Act, 1961. The question, therefore, of carry forward of the loss will not arise. However, if the assessee wants he can maintain regular books of account, show the actual profit/loss earned and thereafter claim the loss of stock due to fire in which even it will be allowed in Income Tax law.Top


HCL Tech

LISTED at Rs 1600 amidst a discernible weakened market sentimed for infotech stocks, this company is widely tipped to be the one that in best equipped to replicate Infy’s dream run at the bourses. Little wonder then that FIIs and FIs alike are queing up at this counter. The grapevine has it that Shiv Nadar can now sit back and smile having played all his cards right at a tough time.


The grapevine has it that this financial institution is finding the going tough raising funds for its ongoing rights issue, which is why the closing date has been extended. Narasimhan’s USP of tax free dividend and a fair yield on investment does not seem to be cutting much ice, given the booming returns the equity market is now offering.


There have been rumours that this company has been raided by the tax authorities Strangely, the stockmarket perceives this as a positive development. As a BSE veteran wryly commented — proves they have a lot of the green stuff. Food for thought!


The grapevine is abuzz with rumours of some IT related announcement likely to be made by this company? Interestingly, there are a lot of takers too for this theory, not in the least a veteran BSE bull who is accumulating its share in large quantities. Watch this counter. Top


Force civic bodies to focus on public safety
by Pushpa Girimaji

WHEN civic authorities ignore basic safety norms in public places, then every step that a citizen takes is likely to be fraught with danger. During the first half of December, a Delhi doctor fell into a drain left uncovered on a busy thoroughfare. Besides a fractured rib, the head injury that she suffered required ten stitches. According to a newspaper report, the accident occurred when the doctor and her husband, also a doctor, went for a stroll in the evening. The street light was not working and the pavement was dark and the lady fell straight into the drain, lost consciousness as a result of the head injury and lay there bleeding. Two factors saved her — that she was not walking alone and she could get immediate medical attention.

Barely three weeks later, a newspaper reported another tragic incident. A three-year old child had died by falling into a water reservoir left open inside a dimly lit underground parking lot. Apparently, the child, accompanied by his four-year old sister, mother and grandfather, was to meet his father at the parking lot in North Delhi and from there proceed to a shopping complex. The family parked the car, got out and before they could realise what had happened, the child had drowned in the uncovered water reservoir, meant for fire fighting purposes. By the time he was taken out of the water, it was too late.

What was, however, common in both reports was the statement made by the relatives about their efforts at preventing similar accidents in future. Yet, even a week after their complaint to the civic authorities, they found the drain and the water reservoir still uncovered. Can there be a more glaring example of callous indifference exhibited by the local Government to public safety?

Whenever accidents such as these happen, municipal bodies must be made to pay a heavy penalty for their negligence. Besides paying compensation, those in authority should be made to take moral responsibility, apologise publicly and resign. And for that to happen, there should be a public outcry against such disregard shown by the civic authorities to public safety. Unfortunately in our country, fighting cases such as these in regular courts is both expensive and time-consuming and most people therefore do not pursue them. And there is no remedy under the Consumer Protection Act for services rendered free and the Supreme Court has held in several cases that the taxes paid by the citizens do not constitute “consideration” or fee for the services rendered by the civic authorities.

Thus, in the case of the three-year old child that drowned in the water reservoir, his parents can haul up the municipal authorities before a consumer court for callous negligence and seek compensation for the loss of their child, because here, the parking services are paid for and the child died inside the parking lot. But in other cases where manholes or drains are left uncovered on pavements, citizens cannot seek compensation through the consumer court for any loss or injury caused. I remember the tragic case of a resident of Ulhasnagar who became an invalid for life when the roof of the public toilet constructed by the local body collapsed on him. The Maharashtra State Commission expressed regret for not being able to compensate the victim under the Consumer Protection Act. For a long time now, consumer groups have been demanding that the CP Act should be amended to bring civic services too under the purview of the consumer courts. We need to lobby much more strongly for an amendment to that effect.

But fighting a case for compensation comes later, after a tragedy. In order to prevent such tragedies, we must force civic authorities to constitute special roving squads, whose job is to detect and cover manholes, drains and similar open holes that could become death traps, particularly in poor light or during monsoon. The civic authorities should also give toll-free numbers on which citizens can call and inform the special squad of any uncovered manholes. Those who call should be informed within an hour’s time of the action taken. In this age of electronic communication, such work is not difficult. Similarly, citizens groups in every locality should become active on safety issues and pressure the local bodies to act. They must also lobby with their elected representatives for a better deal.

I remember some years ago, a consumer group had organised a competition: anyone who reported the largest number of uncovered manholes in the city was to get the first prize. Needless to say that there were many contenders for the first place. Initially, one may laugh at such contests, but not when one thinks of the lives that are lost because of sheer carelessness of the civic authorities. This is one of the many ways of bringing uncovered manholes to the notice of the administration and creating public opinion against the civic bodies that violate basic safety norms.Top


by Garima Kumar

Melstar Technologies

Issue opens/closes: 17-1-2000/22-1-2000.

Issue size: Rs 16.28 crore.

Offer price: Rs 72 (Premium of Rs 62 per share).

Incorporated in August 1986, Melstar Information Technologies Limited (MITL) acquired its present name and status in 1994 following its acquisition by the current promoters. Since 1994, the company has been engaged in the export of software to USA, Switzerland, Italy, etc. Besides, it has also set up subisidiaries in the UK and USA. MITL’s foray into the capital market is to fund its software development divisions and also those of its subsidiaries. The fund requirement for the same has been self estimated at Rs. 15.46 crore. To be entirely financed through the public issue proceeds, MITL’s plans include the setting up of new software development centres at its existing facilities in Mumbai besides investing in its foreign subsidiaries, upgrade its existing hardware, software and infrastucture facilities besides helping in loan repayments to banks and reduction in fund based limits with banks.

On the financial front, the track record of the company appears fair. The same cannot, however, be said about its US’ subsidiary which recorded a significant decline in bottomline during 1999. MITL and its subsidiaries boast of a fairly impressive clientele and its fairly long association with IBM enhances its credentials. Notably, other companies under the same management have been in the red since the last consecutive three years. The promoters of the company appear to be reasonably well experienced in the computer industry although not necessarily so in the software segment. Moreover the funds raised through the current issue are to be used for the further development of its foreign subsidiaries. The post issue equity stake of the promoters will be approximately 37 per cent.

The prevalent scenario in the software industry is one of prosperity and riding the same could prove beneficial for MITL’s prospects in the short to medium term. The issue price of Rs 72 should also help in drawing the necessary funds and provide fair returns on listing. What happens thereafter will depend on the company getting its act together at the earliest.Top


VDO India
CHANDIGARH, Jan 15 (TNS) — VDO India Limited, part of the global Automotive Information Systems giant Mannesmann VDO AG, today announced the launch of a new speedometer system, MoTAs. The announcement, made at the Auto Expo today, signifies the worldwide launch of the new technology.

Local area bank
JALANDHAR, Jan 15 (TNS) — Dr Sardara Singh Johl, Director RBI (Central Board) yesterday inaugurated the Capital Local Area Bank at Nakodar. Mr Amarjit Samra, one of the promoters of the bank, said the bank will operate in Jalandhar, kapurthala and Hoshiarpur districts as per the guidelines of the RBI.

CHANDIGARH, Jan 15 (TNS) — Nivachem, manufacturers of disinfectants and detergents today launched new product Dartos, which has multi-purpose qualities and is a new concept in cleanliness of floors, tiles and bathrooms etc. Dartos is a product manufactured exclusively with local raw materials, having pine fragrance as a deodorant.

Web page
CHANDIGARH, Jan 15 (TNS) — Lions Clubs International District 321-F, consisting of over 150 clubs engaged in social work in Punjab, have launched at Web page. The site created by Mr Tej K. Magazine, District Chairman, International Understanding can be visited at

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